Herman Man
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Emily: [00:00:00] Welcome to the LaunchPod, a product management podcast from LogRocket. Today, our guest is Herman Mann, chief product officer at Bluevine, where he's building the next generation digital banking platform for small businesses.

Originally a computer scientist and engineer by trade, Herman quickly earned a reputation as one of the few developers with a personality, throwing himself headfirst into solving complex technical issues for business users who crave simplicity in their fintech solutions. In addition to leading the product function at Bluevine, he also oversees design, which he says ensures a seamless experience for customers 

and empowers the wider organization to approach problem solving From a user centered perspective. On today's episode, LogRocket's CEO and head of product, Matt Arbisfeld, talks to Herman about how he used his background in engineering to build his career in product, 

what it's like building a product for the banking industry and the unique challenges that come with that industry and how startups can use feedback to disrupt [00:01:00] bigger competitors. So here it is, our conversation with Herman Mann.

Matt: Hello everyone. My name is Matt Arbisfield. I'm the co founder and head of products here at LogRocket and super excited to have Herman Mann, chief product officer at BlueLine on today. Thanks so much for joining us. Great to have you on the show.

Herman: Thanks for having me, Matt. Really excited to be here.

Matt: We'd love to start maybe about your origins and product and it sounds like a lot of your career. Started as an engineer at Microsoft. So we just love to learn about that transition from engineering and how that shapes how you think about product today.

Herman: Yeah, absolutely. So as an engineer, you're really wanting clarity and predictability on the things that you solve in terms of the how you solve the problem. Absolutely. And you wouldn't want to minimize any context switching between the when, so that you can solve it as efficiently as possible. So knowing that has basically been a basic principle of mine, as I try to optimize within our [00:02:00] organization and within product to drive processes that work for engineering and make them the most efficient and effective possible.

So we've created a planning process. that executes on a quarterly cycle, which we measure, adapt, and then execute against the full year goal. 

Matt: you know, something we struggle with is how you know how long something is going to take. So to be predictable, you have to know this project take this long. So how do you deal with that? Or is that? The flexible nature of your product plans is how you solve that problem.

Herman: Yeah, we don't really use story points, but traditionally, a lot of companies do. And obviously story points works when you have the same set of developers and product managers that work together. But we have a variant of that, which is to say, at the end of the day, we know a sized product or project that's being worked on.

Has some sort of sprint criteria. And so we measure it in terms of sprint hours that are spent on [00:03:00] something. And so then we measure, predict against that, try to drive and execute against those goals. And if it spills over. And then we analyze and try to understand why it's spilt over to try to do better next time.

Matt: And then yeah, after Microsoft, you went to zero where you led engineering and product management. It sounds like I delivered over a hundred percent growth there. So we'd love to learn about that experience, why that was so successful. And. How you able to grow so quickly?

Herman: It was really a great and a really fun time. you know, The global people portfolio just give a little more background consists of different payroll products that we built. So I think gusto think ADP payroll products, but we built them for. The UK, the Australian, the New Zealand and the U.

S. market. So we did that and we also built brand new products. So like we built zero expenses, think Expensify, but works really well with the accounting ledger. I can't take the credit for the success there, but what I can say is, you know, there are two factors that kind of led to that 120 percent year over year growth.[00:04:00] 

Number one, just the market conditions are right. And number two is just product innovation. And so let me go into those a little bit more detail. So number one in terms of the market conditions, accounting sass at that time was still relatively new, and so zero was built from sass and in the cloud from day one, and so it didn't have any of that legacy hindrance that existed on that platform.

And so it could really innovate, just to put in context in terms of the market and where we were. Into it was still working on QuickBooks desktop, and they started investing in QuickBooks online. So you could get a sense in terms of where the market was at that point. But given the fact that Xero started in the cloud and was a cloud first provider, that just attracted a lot of attention, especially in the US.

And so that led to growth. The second example I'd give is really around product innovation. And zero thought about things differently. And I'd say, me in general just likes to think about things differently. And so, you know, one [00:05:00] thing as an example for what we were doing was really understanding what customer pain points were, where they spent their most time in a product and how we can automate or optimize kind of that workflow for them.

So an example of this is really like transaction categorizations, right? If you're a bookkeeper and accountant, you're in there back in the day, you would manually categorize a transaction that comes through, or you'd build rules based systems to go do that. We actually built a machine learning model that actually could do that because we had troves of data.

And what we did was we turned the experience on its head such that the accountant, bookkeeper or the small business. Itself would then go validate and verify whether or not the model was accurate. And so using that and using that scaled model, we were able to go automate and build kind of the infrastructure underneath it to really accelerate that automation around categorization.

So again, in summary, I'd say, two things really market conditions are right. And, we really push the envelope and try to [00:06:00] innovate where we can be different.

Matt: You doing machine learning before it was cool. With the automation and I guess any learnings from that as folks are adding AI and automatic categorization to their products. And how was that, how did you get the results to be so successful from that initiative?

Herman: You know, Like AI and large language models, obviously all the rave right now. Back then it was still somewhat novel in the sense that it wasn't like machine learning was new, but there just wasn't the compute power to enable it. We've just reached that right apex where.

compute power is lower. You have the right technology around cores and chips, and you have a bunch of research that has built up over time that now you can execute on, right? And so, you know, what I would say is if you take to modern day kind of what AI and machine learning and large language models do really well is, They're great at creating ha surprises and moments like that.

Like when you look at Sora, for example, that just came out. [00:07:00] It's amazing because you look at the videos and you don't expect it to be that great, but it is. But there really is no downside to those models being wrong, right? Compare and contrast hallucinations when you have a baseline and really understanding what the output should be, and you want the model to generate something that is, has high output or better in terms of quality.

That's where the models are still a little off. And so what I would say is from a technology standpoint, there's still an expectation and an opportunity and really a need to reduce the hallucinations or the delta between what is actually right and what is wrong. Thank you. But at the same time, I think as we're getting there, what I would say to others is, use AI machine learning where it makes sense, but also use it in a context where it's validated and you don't give it the, you don't give the user the sense or the truth that it is a hundred percent accurate.

And so at zero, what we did was, we [00:08:00] basically said when we auto Categorize these transactions. We posed it back to the user and we actually said, Hey, we believe that it should actually be this category validate and verify whether or not it's right. And so by then we weren't giving it a hundred percent confidence, but they were getting more confidence in the system as they recognize that we're more and more right.

And at the same time, they had the ability to affect our models by saying, no, this is actually wrong. It should be this

Matt: That makes sense. Don't want to. Run into the air Canada situation where you're giving advice. It seems like it's from a human. So the human loop makes a lot of, Maybe then going to your current role at blue vine, sounds like you joined as a chief product officer and was the product team already established and just would love to learn that what that experience was like coming in and working with the existing product vision, but then also bring your own take and how you went about that.

Herman: Yeah, it's a really interesting question, Matt. I think, to be honest with you um, a y'all co founder and [00:09:00] CEO of blue vine. He was looking for a new CPO. In fact, like you said, the first CPO of the company, and, One of the things that I, honestly did was really understand from a y'all, was this something that he wanted?

Or was this something that the board was asking? Very different results if you're going in there with mismatch expectations. And he always very upfront. He's no, this is something that he wanted. And, it was a very open, transparent, great product leader and thinker. And so really I went in there to listen and learn first, to spend a few weeks and really understand what the plans of the company were and how the company believed we were going to go execute them.

And then from there, form my own mental model in terms of what I believed the plan and the vision could be and what we needed to get done to get there. And so what I said was, my, my main thing was to come in here, listen and learn for the first few weeks and then start applying incremental changes while aligned with, with a [00:10:00] all and what the company was doing.

And so. I've seen many leaders come in here and not do that and try to impose their will too early. And frankly, it backfires because you don't really have the full context of what the company needs. That's what I did. And, when I got here, BlueVine really was a lending only company.

And our goal was to become a small business banking platform. So for me, it really was, understanding, driving that strategy and then pivoting and making changes to that strategy where I thought made sense and to make sure we had key pieces around talent so that we could execute and get there. 

Matt: once you listened and learned, was there an initial initiative you took on to build out a new product category? Or did you bring on talent? What was the second step after you got the lay of the land,

Herman: next thing that we did, going from lending was we were going to go build a DDA or deposit account, a business checking account. And so, with that, we started building out exactly what that infrastructure would [00:11:00] could be. Did we have the right talent and headcount there?

And advocating for that headcount and then hiring the best people that we could find to go do that. Yeah. And one thing that we did do is, having been at zero before and working on a payroll product. I've appreciated that you want to hire a players that are super smart, but sometimes you also need people that just have context and domain in an area.

And so for me, it was making sure that we had the right balance between both sets of talents.

Matt: That's interesting. Yeah, because banking is such a specific industry that it's, you know, It can be hard to learn the lexicon without having experienced it already.

And yeah, maybe could you talk, give some background on what Bluevine is and where it lives in the baking industry and your focus?

Herman: So BlueVine is a small business banking platform. We provide small business banking products to our customers. So these are, banking products like checking accounts. Credit products like line of credit as well as credit cards, and we [00:12:00] have an AP solution around bill paying payments.

What's key here is it's dedicated and built for the small business from the ground up. And so, you know, we strive to be that financial banking heartbeat for a small business.

Matt: And so you're, are you typically competing against? You're big banks and, how do you sort of position the product against those larger banks

Herman: you know, We view our competitors really as the traditional large wire house banks out there. And when we compare ourselves against those banks, the way that we look at it is, we are one, a platform that is built dedicated to the main street small business.

So that is my construction company. That is my architect that helped me do the remodel in my house. That is that. We don't try to shoehorn a platform that works both for consumer as well as for enterprise, right? This really is a small business. And the second thing is, what I would say is, we're nimble and we're able to execute.

Ultimately, if you look [00:13:00] at what we are as a challenger banking platform, the real thing that we have over traditional banks is the ability to innovate and to deliver value for our customers immediately. And so that's, our pride. And that's basically one of the things that we're maniacal and focused on.

Matt: and what's an example of that? Like an innovation that really makes a difference for a small business.

If you look at it from a regulatory standpoint one of the challenges that, that, exist in banking in general is there's a regulation framework that exists. And the way that I see this is, look, to solve that, everybody has to solve that problem. But you could actually solve it in a way that is net an advantage for yourself, because you can do things better and different than what traditionally you would do.

Herman: Other, banks or providers too. And so an example of that is just even the onboarding [00:14:00] experience, getting back to the question that you had. When you onboard into a bank, KYB and KYC, know your business, know your customer, are paramount and are required to be done properly. And so if you go to a traditional bank, you'd have to walk into the branch, spend a few hours, go open up a bank account.

Or if you go online to those banks, if they do support it, it could take hours as well to, to decision. At BlueVine, what we've done is we've rethought the problem. We're like, okay, how can we decision? Whether or not we want or are right for you as a banking provider and make that decision within minutes, right?

So customer can come in, upload all the documentation that they need, or in many cases were able to go get the data with their consent on their background data so we can decide what we want to do. And all this is done. K. Y. B. And K. Y. C. And the decision within minutes. What's more is we not only open up a bank account, but we're able [00:15:00] to match the expectations that a business who might be banking at a traditional bank for a long time, having expectations of high check deposits, immediate access to money, we're able to go do that and provide that experience to the customer as well, all the while making sure from a blue vine perspective, we do this responsibly.

financially for BlueVine. So the unit economics work out and there's no fraud or risk that falls on BlueVine's plate. So we're able to use that technology and really turn that experience on its head from one that is, a treacherous experience to go open up a bank account to a really delightful one.

Matt: Awesome. Yeah, I remember when we started company years ago, had to book an appointment at the bank and go in and. You don't have a document, so you go back. Definitely reducing friction. I can see how that's really important. One area I'd love to talk more about is I'm guessing you have tens of thousands of customers and there may be one or two pre built companies.

So you're getting a [00:16:00] lot of feedback from all these different folks and often probably not the most technical folks. So I'm curious how you incorporate all that feedback How you match that against your own vision and your CEO's vision for the product and how you bring that all together to determine what's due next 

Herman: yeah, absolutely. So I say there's a number of different factors that we use. Obviously there's, we really spend time with the customer to really understand what the customers want, prospects want, and so forth. There's a combination of quant and there's a combination of qual data that we use, right?

Like mass surveys that go out on the quant and then on the qual really deep interviews that we do with customers across the product team, including myself, that I spend with customers to really understand the opportunity. Then what I would say is, we do have a vision and we do have a belief of where we want to be.

So we have a five year vision for where we're going to be in every year when we start a calendar year. We look [00:17:00] at that five year vision and say, all right, Are we really marching towards there, or do we have to change anything? And we align with the board in terms of what we want to do in the five year vision as well.

And then we chunk it up and say, all right, what's one year one, year two, year three, right? Really focusing on the next three years. You know this, Matt. You could create any plan for five years and how real is it after four and five? One, one, there's more fidelity. Two, there's less than three.

There's, and so you stop at that point. And so for us, it's making sure that, our year long vision actually heads towards the right goal all the while making sure that we're validating and making sure that our customers problems or immediate problems are solved and the solve for what we want to go do there is a linear slope towards where we need to get to.

So that's what I'd say that we do.

Matt: How much of your roadmap would you say is towards that five year vision? And I'm guessing these bigger projects versus there are always these bugs and iterative and UX improvements. [00:18:00] How do you balance those two buckets? Internally,

Herman: Yeah. Yeah. It's a great question and there's ebbs and flows, obviously when you have more issues that kind of get surfaced. Yeah. In the near term, you spend more time on solving those bugs, right? But I think what's important for me always is to make sure that we're strategically aligned.

So coming out of the year, what are the medium to big bets that we're making? And I want to make sure exiting 2024, we actually hit those big bets. What I do is at any given point in time, I make sure for anything that is strategic, I have a minimum investment of people in there that I just never touch unless there is some, circumstance that causes people to go shift.

COVID was one in 2020. But aside from something as severe as that, where it's a company shift and something we need to do or a market shift, I will always have dedicated people. So we make forward progress. [00:19:00] Then it becomes a question of, with the remaining resources, where do we prioritize?

And it becomes more of an ROI type conversation. We do run a rice ish kind of framework. Not quite right where we do look at reach, impact and confidence on what we're trying to do. And we'll assess the situation. Ultimately, it's super important to keep our customers happy and make sure that we're solving their workflows that they have problems with today.

So we'll invest in that. But at the same time, if we know that we're going to do a 10 X multiplier change on this workflow, by introducing this new set of technology, we will do that and invest in that as well. I wish I could say there's a science, there's a bit of an art and science.

Matt: And yeah, I love the idea of if there's one or two big things you have to do. You just have to protect that team at all costs and make sure that seems making progress every day. Maybe last question would be, you're going up against some of the biggest companies in the world.

I know a lot of our listeners are [00:20:00] also maybe startups that are trying to displace the existing category. Any advice you have for them on how to think about how to disrupt bigger companies or bigger industries and take market share,

Herman: , so the one thing I think , You know, as a startup, you got to really think about what your North star is and what you're going to be good at. I think each segment is slightly different, but I think the opportunity is to really understand the customer and to really build something that solves a problem for them.

. In a way maybe that they hadn't thought of before. But once they use it, it's an aha Eureka type moment. And so I say this because, at BlueVine, as we're looking at small businesses, our key thing is to really understand, all right, we went from lending into a banking platform.

Why was that? We realized quickly as we were talking to customers, they loved our lending product. Absolutely loved it. But they were also, asking and pulling us into banking saying, Hey, why don't we have a [00:21:00] relationship with you on the banking side? And we were seeing the data as well with their banks and how they use the data.

Their existing banking platform and other services they had. And we realized as we talked to them more, what they really wanted was, today they have a hodgepodge of different providers, what they really want is one platform that works across everything and just works across the board.

And so that was our moment where we're like, okay, we can go shift and make this happen. Now I say that because, small businesses are different. Every single small business is different. And so if you're serving the segment of small businesses, you do something different than enterprise, right?

If you go to enterprise as an example, it's still the same tenant in principle, and that tenant in principle is that you really have to understand who you're selling to now. I was at Microsoft. And so the challenge with enterprise often is two things. Number one is the buyer is very different than the person who's using the software.

And number two is sales cycles are horrendously long, right? And so knowing [00:22:00] that and knowing those two kind of things, there's two if you will, restrictions, you really have to dig deep to find who the right user is, both from a buyer perspective and from the user perspective, understand that workflow, go deep and then be able to go execute so that you can go demonstrate that value to them.

Matt: Going back to when the decision was made to go from lending to building the full banking platform. I know that's something I talk to product leaders all the time of when do you That second big feature, the second big initiative, when do you have frameworks for, of when do you invest in that whole new area versus you just keep going down the current plot, the current feature or roadmap that you have

Herman: You know what I would say is there's probably two things, right? I would say, do you push your way into it, or do you get pulled into it right? And then ultimately, it's. Is now the right time? And do you feel convicted? What I would say is with me often, [00:23:00] there's a vision for what we want to go do.

And so there's a belief in terms of time frame on this is what we need to do to get there. Period. And so you start with that flag, that line in the sand that says, Hey, by X time, we need to go get this out. And the reason why we need to get this out is because the donut kind of looks like this.

If we're able to go do that, and so it starts with the conviction first. And then from there, it's all right, is now the time to go get there? Or do we push out that conviction more? so when you're able to go answer kind of those first principles type questions, then you're able to then say, all right, and here's what it means if we are to go do this.

Let's go work backwards and say, what do we have to give up now? And what aren't we delivering in the next six months to go hit this in a year? And there's a lot of questions that kind of come into that as a startup, this, we're it's not like we're Microsoft or Google and we have a cash cow that just.

You're constantly making sure that the balance sheet works out, and so [00:24:00] really you're looking at all things from cash burn through to what are the market conditions? Is the market ready for this, right? And so all those kind of factor in, but I believe it has to start with a conviction first so that you're proactively trying to get there as opposed to just serendipitously landing at that position.

Matt: from what you've seen. Do you think people, product leaders tend to go too broad, too quickly, or that they could be more aggressive with building out the platform because you've been so successful at building out these platforms, do you encourage people to think more in that mindset or to maybe be a bit more careful about how they expand the product

Herman: Yeah, I'd probably say maybe careful is the wrong word for me. Like thoughtful is probably the better word to go do it. I think, I'll give you a real classic example. There's many different products that launch in one market and they're like, Oh, I'll just go to the adjacent market and run with it.

The reality is that. Sure, you might be able to go get some new customers, but can you retain those customers over [00:25:00] time if you don't have the right product? And so for me, it's more about being thoughtful around the situation. I am a firm believer of you do have to go build enough of a product More than MVP for you want to be done with what you're working on first before you jump off and start working on the second, right?

There are times where that may not be true, but as a principle for me, generally, it's let's make sure that we do something well before we go off and distract ourselves to do something else. Now, if the market has a gaping hole and you see it, And it's a first movers advantage. Yeah, I'm gonna run there as fast as I can.

But I would say often, my mindset is let's not cut corners. Let's do something well so that we could at least not only, get customers but retain those customers and then be able to go cross sell in our platform to the other adjacent products.

Matt: Yeah, super, super interesting [00:26:00] conversation. Thanks so much for taking the time today to share your learnings and any followups for the audience where they could find you or any, yeah, any asks from them.

Herman: Yeah so you can find me on LinkedIn, Herman Mann, Chief Product Officer at BlueVine, or on X, Herman underscore Mann.

And yeah, thanks a lot, Matt. This was a lot of fun.

Matt: Thanks everyone.